SBA loan basics
Short answer
An SBA 7(a) loan can finance a significant portion of a business's purchase price that is attributed to goodwill, with no specific cap on the percentage of goodwill.
The SBA does not set a specific maximum percentage for goodwill in a business acquisition. Instead, the focus is on a thorough valuation of the business as a going concern, including both tangible and intangible assets (like goodwill, customer base, brand reputation). The lender must ensure the purchase price, including goodwill, is justified by the business's earning potential and market value.
A service business is being acquired for $1,200,000. Its tangible assets (equipment, inventory) are valued at $300,000. The remaining $900,000 is attributed to goodwill. The SBA 7(a) loan can finance this acquisition, provided the total purchase price is supported by a robust business valuation.
Insider move
Lenders require an independent business valuation for acquisitions, especially when goodwill is a substantial component. They ensure the valuation is sound, defensible, and supports the purchase price, demonstrating the business's ability to generate sufficient cash flow to service the debt.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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